As we move deeper into 2025, both the New Jersey Legislature and the United States Supreme Court have issued landmark decisions and proposals poised to redefine employment rights and obligations across the state and country. Below, Burnham Douglass Law Group spotlights the most impactful updates for our clients and readers.
New Jersey’s Proposed Bans on Non-Compete and No-Poach Agreements
On May 19, 2025, the New Jersey legislature introduced two sweeping bills—S.B. 4385 and S.B. 4386—which, if enacted, would effectively ban non-compete and no-poach agreements for most workers in the state. Notably, these measures would apply retroactively, voiding even many current restrictive covenants.
Key Provisions
Non-compete and no-poach clauses: Broadly prohibited for all but certain “senior executives” under narrow exceptions. For the majority, any contract or policy hindering post-employment job mobility would be invalid—including agreements currently in force.
- Limited exceptions: Senior executives earning over $151,164/year in policymaking roles may be subject to non-compete clauses, but only if strict new criteria are met (including spatial, temporal, and scope limitations, salary continuation, and written notice).
- Employer obligations and penalties: Employers must notify affected workers within thirty business days of the law’s effective date, and must display approved notifications in work areas. Violations can result in private lawsuits, injunctive relief, liquidated damages (up to $10,000 under S.B. 4385), and attorneys’ fees.
- Debt-related restrictions: S.B. 4386 also bars agreements that require employees to pay back “debts,” fees, or penalties upon leaving a job—further protecting workers’ ability to change employment freely.
This legislative activity mirrors nationwide efforts to limit restrictive covenants and protect employees’ post-employment opportunities. New Jersey businesses should proactively review and revise all existing employment agreements in anticipation of possible enactment.
U.S. Supreme Court Overrules Background Circumstances Requirement for Reverse Discrimination Claims
On June 5, 2025, the Supreme Court issued a landmark decision in Ames v. Ohio Department of Youth Services, No. 23-1039, 598 U.S. ___ (2025). The Court unanimously struck down the longstanding “background circumstances” rule, which previously required majority-group plaintiffs (typically white or male employees) to meet a higher burden of proof in Title VII “reverse discrimination” lawsuits.
What Changed?
- Uniform standard: All plaintiffs—regardless of majority or minority status—are now evaluated under the same legal framework when bringing discrimination claims under Title VII.
- No extra burden: Majority-group plaintiffs no longer must present specific evidence that the employer is disposed to discriminate against the majority, removing a key hurdle in such cases.
- Broader context: The Court called for equal protection in discrimination law and left open the possibility of re-examining other evidentiary frameworks in future cases.
Implications for Employers and Employees
- Potential claim uptick: Employers may face more Title VII claims from majority-group employees, as barriers to pursuing these claims have been eliminated.
- Policy review: All employers should ensure their nondiscrimination policies are robust and compliant with Title VII as interpreted by this new ruling.
Why These Changes Matter
Both the pending New Jersey legislation and the newest Supreme Court precedent mark a trend toward expanding workplace protections and enforcing fair labor practices. Employers in New Jersey and nationwide need to stay ahead of these developments—by updating contracts, training management, and reassessing workplace policies—to protect themselves from future liability and to promote an equitable work environment.
Questions? Burnham Douglass will continue to monitor these evolving legal landscapes and stands ready to advise clients on their compliance and litigation strategies as these developments unfold. Call 856-751-5505 or complete our online form to schedule a consultation for your legal matter. Located in Marlton and Northfield, New Jersey, we serve clients in South Jersey, including Marlton, Evesham Township, Cherry Hill, Camden County, Burlington County, Northfield, and Atlantic City.